Benihana Company Essay

Helping our guests feel encounter is as important as our provision. And it is just as great a skill. Ever striving for righteousness in hospitality, it is truly our eatery family who has built Benihanas success. ac club HistoryBenihana, Inc. owns and permits eaterys in the Benihana and Benihana Grill range of Japanese dinnerhouses. The restaurants extraize in an exhibition-style of Japanese planning called teppanyaki. Customers sit around a communal carry all everywhere at which a Benihana chef slices their sea nutrition, steak, chicken, and ve presentables with lightning speed, grills their meal right in front of them, and then tosses it accurately onto their p tardys. The restaurants are decorate with Samurai armor and valuable wile, and Shoji rice paper screens class the dining areas. For the pecuniary yr quiting ring 31, 1996, the connection had sales of over $81 one million million million, an uncomparable high. By December 1996, Benihana operated a pith of 49 licensed and wholly owned restaurants in 20 states as well as in Bogota, Columbia, and Aruba, Netherlands Antilles. azoic History, from neat of Japan to in the buff YorkThe founder of Benihana, Inc. was a 25-year-old surpassing wrestler from Japan named Hiroaki Rocky Aoki. He got his a rise in the restaurant commercial enterprise by functional after school in his familys c forwardee bean shop in downtown Tokyo. His mother named the family business enterprise Benihana after a red f secondaryer that survived the bombing of Tokyo during World War II. Rocky was a scrapper, defending himself in the streets and schoolyards against prodigiousger boys. He got qualified on wrestling, became a national university champion, and earn a place on the 1960 Olympic team. Although he didnt compete because he was over his weight limit, he did fall in love with New York when the horizontal s passped there on the way to the Games in Rome. That fall he left Japan for the joined States.In 1964, Aoki graduated from New York Comm building blocky Colleges give lessons of Hotel and eatery precaution. During the summer he earned m adepty driving the exactly ice figure out truck in Harlem. The job was not easy, as he explained in an article in way Review. Every succession I robbed, I get up earlier the next daytime and piss later to make up. Every time I lose money, I get much challenge. With that philosophy, he managed to save $10,000 during the summer, which, along with a loan, was enough to dent his first restaurant, Benihana of Tokyo.Aokis concept for his new restaurant, derived from effectiveness restaurants he knew of in Japan, was better entertainment and part pabulum service. He wanted to offer Americans viands they were familiar with, such as chicken, steak, and shrimp, prepared in a novel climb. He chose the teppanyaki tablea stainless steel grill surrounded by a wooden eating surfacewhere customers could spotter a knife-wielding, joke-telling che f prepare and serve their feed. His parents and brothers came from Japan to uphold him get started.Unfortunately, New Yorkers equated Japanese sustenance with mad fish and werent comfortable sitting at a table with strangers. They ignored the midtown Manhattan eatery until the restaurant amateur of the New York Herald Tribune gave it a glowing review. Suddenly, everyone in New York, including the Beatles and Muhammad Ali, wanted to sit around one of Benihana of Tokyos four teppanyaki tables. Within sixsome months after the review the restaurant had paid for itself, and Aoki quick opened another restaurant in a large, fancier building. The new view provided the same teppanyaki-style cooking but was decorated with valuable art, Samurai armor, heavy wooden ceiling beams brought from Japan by Aokis father, and slide Shoji screens to provide some privacy.1965-80 Building a CompanyThe Benihana concept combined reasonable prices with good food, and, by preparing what was eaten rig ht at the table, held waste to a minimum. shekels were good, and, in 1968, Aoki opened his first Benihana of Tokyo out of doors New York Cityin downtown Chicago. That location made $700,000 in its first year and go along to be one of the phoners top earning outlets.Between 1969 and 1972, the union opened six much of its own restaurants and licensed exemptiones to open another ten. In a joint venture with the Las Vegas Hilton, the accompany highly-developed Benihana Village, a 38,000-square-foot complex of restaurants, bumps, and other entertainment venues. In 1972, the company grossed $12 million and the Harvard argumentation School selected Benihana of Tokyo as a case examine of an entrepreneurial success story.With business deviation so well, Rocky Aoki could devote time to his other interests which include racing balloons and motorboats, collecting items ranging from vin denouncee cars to slot machines and eruditeness backgammon. Rocky wanted to play, Joel Schwartz, the companys president, explained in a 1989 Forbes article. To help oversee the chains operations and expansion, Aoki brought in a management company, Hardwicke Cos., as a partner in 1976. The relationship lasted only four years and, in 1980, Aoki ended the partnership, remunerative $3.7 million to break the contract. As Rod Willis of Management Review explained in a 1986 article, He Aoki tangle the companys management style clashed with his predominately eastern workforce, and he wanted to maintain control over each restaurants quality. The following year Aoki settled, without admitting any guilt, a Securities and Exchange Commission press that he had improperly traded in Hardwicke investment company trance serving as vice-president of Hardwicke.The 1980s Ups and DownsTo help return off the debt incurred in the split with Hardwicke, Aoki decided to embrace part of the company globe. He accomplished this by having Benihana of Tokyo (BOT) form Benihana interior(a) Corporat ion (BNC) in 1982 and then taking the latter company public the following year. Investors paid the Miami-based BNC $11 for a unit consisting of two third estate shares and a warrant to sully another at $6. With the $5.5 million raised by selling half a million of these units, BNC bought 11 restaurants from Aoki in exchange for 60 percent of the BNC green stock and $2.5 million to pay BOTs debt. subsequently in the year, BNC bought another three restaurants from BOT for $7 million.In spite of the new corporate structure, Benihana of Tokyo and Benihana field Corporation remained under the management of the same free radical of executives. As corporate president, Joel Schwartz keep to oversee the day to day operation of both companies. Aoki, who served as chair of both entities, retained 51 percent of the common stock in BNC and unplowed about 30 restaurants in the privately held BOT. Aoki developed new concepts for the Benihana food chain but he in addition keep to play une xpressed, becoming a championship-level backgammon player and setting a world record in off-shore powerboat racing. The Double Eagle V, a 400,000 cubic-foot gas balloon, displayed the Benihana logo as it became the first crewed balloon to successfully mishandle the Pacific Ocean, with Aoki as one of the crew members. unmatched of Aokis new concepts was Benihana case Classics, a note of Chinese gourmet rooted(p) foods, introduced in 1984 and sell in supermarkets. Chinese cuisine was chosen when the company found that Japanese food didnt immobilise well. Within a year the Classics were the best-selling oriental frozen foods in the United States, with sales in one quarter alone reaching more than $40 million and profits climbing to over $4 million. The companys stock took off, going as high as $21.50 in 1985. In December of that year, eating house and Institution magazine named Benihana of Tokyo the most popular family-style restaurant in America. At that time, Benihana of Tokyo and Benihana national together operated or libertyd restaurants in 60 locations, from Seattle to New Jersey, serving a total of 25,000 customers a day.Benihana Nationals frozen food success quickly attracted the attention of major(ip) food companies. When Campbell soup and Stouffers began offering their own lines of eastern frozen foods, however, Benihana couldnt compete. The company lost $11 million on frozen foods between 1985 and 1987 and lastly interchange the business, for $4.5 million, to the small company that had been producing the dinners for them.Frozen food, however, was not Aokis only new idea. In 1985, Benihana National opened its first seafood restaurant, The Big Splash, just northeastern of Miami. Aoki believed the sea would be the primary supplier of food in the future, and, borrowing an idea from a Malaysian fish market, came up with the concept of a seafood securities industry/restaurant. Customers could choose from hundreds of varieties of fresh seafood, de cide how they wanted it cooked, and have it off it being prepared. The idea was so popular initially that a second Big Splash was opened.The seafood restaurants briefly experienced difficulty, however, registering losses of $2.7 million during 1987. The wide renewing of options ran completely counter to the tight focus and token(prenominal) waste of the Benihana steakhouses. At the Miami location, the majority of customers were retirees who resented the high prices and favourite(a) to eat fish they were familiar with. All we sold was salmon and red snapper, Aoki told Eric Schmukler in a bunt 1989 Forbes article. The company closed its Big Splash outlets in March 1988. The 1988 pecuniary year was a hard one for Benihana, as the company recorded a loss of nearly $7 million.Despite the companys financial problems with Classics and Big Splash, the Benihana restaurants themselves were still popular. By the end of fiscal 1989, the publicly owned Benihana National Corp. reported pr ofits of some $1.8 million on sales of $34 million at its 20 restaurants, with Aokis privately-held Benihana of Tokyo taking in same revenues.1990-94 Making a TurnaroundRocky Aoki kicked off the new decade by opening a gallery in one of the Miami Benihana restaurants to display a portion of what was becoming k like a shotn in the art world as the Rocky Aoki Collection. Having spent more than a year consolidating his diverse assemblages, Aoki told Antiques & Collecting, I forecast its a natural to have a gallery here. More than 90,000 masses eat in this restaurant every year why not provide them with something beautiful to look at, not to refer buy, if they so desire. In a 300-square-foot space that had been the restaurants gift shop, diners could view etchings by Icarts, lamps by Tiffany and Handel, and bronzes by Remington.The publicity about Aokis collection helped generate business for the restaurant, and overall company revenues continued to grow. Profits, however, were les s than a million dollars a year, and BNC stock fell below $1 a share. raging at the situation, some shareholders sued. As Marilyn Alva reported in a 1992 Restaurant Business article, the shareholders claimed Aoki and his management team were in a conflict of interest by managing the two companies. The complainants further maintained that Benihana management had malversate the assets of Benihana National Corporation, passing them through Benihana of Tokyo for their in the flesh(predicate) benefit. The shareholders, however, were ultimately unsuccessful in trying to post control of the company away from Aoki.Meanwhile, Benihana management took utility of a health-conscious American publics increment interest in Japanese food and entertainment. With the tag line, We have been the restaurant of the 90s since the 60s, Aoki and Schwartz instituted a major advertise campaign stressing the fact that Benihana had always offered healthful food. soon afterwards, in 1993, the Atlanta Be nihana of Tokyo restaurant added an 18-seat sushi bar and 35-seat Karaoke dining room to draw more customers on weekday nights. Despite the higher labor and food be associated with sushi, the company reported an increase in drink sales, and a lot of sampling of the $.99 sushi pieces by people waiting to eat at the traditional teppanyaki tables. larn from its experience a decade earlier, in 1994 Benihana National Corp. decided to get into the frozen food business again. This time, however, by entering into a licensing agreement with Campbell Soup Co., the company hooked up with a major marketer rather than trying to compete with the big names. The new product was a line of frozen stir-fry kits featuring the Benihana trademark.The dinners served six people and sold for about $8.00. As Peter McMullin, an analyst with Southeast Research Partners, told Florida Review.Net, This time the strategy makes sense because it is linking with a high visibleness food company to help strengthen t he statistical distribution side and offsetting the razor-thin margins of retail by manufacturing with a low cost producer like Campbell. By the end of the fiscal year, revenues were over $70 million, with profits up 41 percent to $2.4 million.1995 and Beyond A New CompanyAt the beginning of 1995, Benihana National announce it would buy Aokis 21 Benihana of Tokyo restaurants on the U.S. mainland, along with the U.S. rights to the Benihana trademark, for about $6.15 million. On May 16, a newly created subsidiary, Benihana Inc., acquired the BOT restaurants and, through a merger, simultaneously acquired Benihana National. BNC shareholders sure one share in the new belongings company for each of their shares of Benihana National. Aoki continued to serve as chairman of the new company and Schwartz as president.Benihana Inc. now owned or licensed the 43 Benihana restaurants in the continental United States along with a franchise in Honolulu. It also had the rights to develop or licens e Benihana restaurants in Central and South America and the Caribbean Islands. Aoki kept private his Benihana of Tokyo restaurants in Hawaii, Britain, and Thailand.During 1995, the new company took several steps to attract more customers. Benihana introduced weekend luncheon service and, following the success in Atlanta, opened sushi bars in seven locations. The company also instituted a national Karaoke contest for its patrons. In the fall, the company opened its first smaller initialise unit, called the Benihana Grill, in Sacramento. At 3,800 square feet, the Grill format was less than half the size of the traditional Benihana, and enabled the company to open units in smaller locations, particularly in urban areas. Schwartz had been refining this format since 1989 as an ersatz to the companys more common free-standing, special use restaurant buildings. The Benihana Grill was designed to deposit 10 to 12 teppanyaki tables, compared to the 18 tables in the characteristic Beniha na. Analyst Peter McMullin remarked, Initial indications are support even before the grand opening. With the lower capital costs of approximately $500,000 versus a stand-alone restaurant cost of $2 million, this could become an enormous suppuration vehicle for Benihana.The new hours and offerings helped increase guest counts in subsisting restaurants by 8.7 percent and same pedigree sales by an average of 7.7 percent for fiscal 1996. This rise, plus the addition of the Benihana of Tokyo restaurants and the new Benihana Grill, resulted in annual revenues of over $81 million.Benihanas step-up came primarily from increased traffic in its existing restaurants, and the company continued to support that strategy. Early in 1996, in an effort to gain a larger share of the ethnic market, the company launched Spanish-language television advertisements in Miami and Los Angeles. In May, Benihana kicked off a two-year, $5 million ad campaign, focusing on the entertainment range of teppanya ki cooking. We want to bring the Benihana name to a antithetic audience, company president Joel Schwartz told Nations Restaurant News in a May 6, 1996 article. The ads demo that Benihana is a place the entire family can come to and have a good timea place they will see the chef perform and snotty-nosed shrimp. Individual restaurants also developed innovative marketing techniques. A visit and meal at the Benihana in Bethesda, Maryland, for example, is one of the activities in the countys social studies programme for third graders learning about Japan.The company did not depend entirely on its existing restaurants for growth. During 1996, it also signed leases for several more Benihana Grills and expanded its franchise operations, including restaurants in Bogota, Columbia, and Aruba, Netherlands Antilles. Benihanas track record of bulletproof growth in same store sales, rising customer count, and profitability appeared to be continuing into the late 1990s as revenues for the fir st half of fiscal 1997 were up over eight percent from the year before.Further ReadingAlva, Marilyn, Very Rocky Business Aoki Besieged by Shareholder Suits, Restaurant Business, February 10, 1992. Benihana purchasing Founder Aokis Units, Nations Restaurant News, January 16, 1995, p. 14. Benihana Profits Rise 67% for First club Months of Fiscal 95, Nations Restaurant News, February 12, 1996, p. 12. Benihana scrutiny Stir-Fry Kits, Supermarket News, October 17, 1994, p. 28.